11 ms·

Backblaze: Mounting Losses, Lawsuits, Sham Accounting, Insider Selling

271 points by PaywallBuster 1y ago

PaywallBuster 1y ago
tl;dr this is activist short seller report/investigation, some of the points made: - never been profitable - execs selling aggressively - loosing customers to Wasabi - accused of cooking the books - being sued by former execs for anti whistleblower/wrongful termination - execs leaving
- ryao 1y ago
  Wasabi uses ZFS while backblaze does not. I wonder if this in any way contributed to the cost differences.
  - k8sToGo 1y ago
    Wasabi also has a minimum storage requirement of 90 days
  - mkj 1y ago
    Wasabi doesn't seem to be a public company, so are they profitable?
  - perrygeo 1y ago
    I suspect it does. When I was evaluating Wasabi years ago, the sales engineers were very interested in knowing what specific kind of data we had and how compressible it was. So my guess (pure speculation) at the time was they use ZFS compression internally but charge customers for the uncompressed size.
    - dist-epoch 1y ago
      most of the files that matter, the big ones, are already compressed/high entropy - images, videos, ...
    - Twirrim 1y ago
      If they care about compression at the ZFS level, that means your file is going to be visible to anyone able to log in to the server, because they're relying on (at best) encryption at rest. That's not a great security model for a storage service. You don't want anyone to be able to log in to a server and see your actual files unencrypted. If they're going to compress/decompress, ideally you'd want them to have that at the point of ingestion, then encrypted, and then store that on the target drive. That way you can put very strong controls (audit, architecture, software etc) around your encryption and decryption, and be at reduced risk from someone getting access to storage servers.
  - ksec 1y ago
    >Wasabi uses ZFS Can't seems to find anything specific about Wasabi uses ZFS on Google. And Wasabi doesn't change you on egress. So I guess they are similar in terms of pricing. Although B2 seems to be way more popular on HN. I rarely see Wasabi here.
    - rustc 1y ago
      > And Wasabi doesn't change you on egress. Wasabi only allows as much egress as the amount of data you're storing and I don't think you can even pay for more: https://wasabi.com/pricing/faq#free-egress-policy https://wasabi.com/pricing/faq#free-egress-policy.
      - j45 1y ago
        You can put something like cloudflare in front of it fro free. There's a number of CDNS that participate in zero egress.
    - badlibrarian 1y ago
      Book price is $6.99/TB for Wasabi vs $6/TB for Backblaze. Wasabi charges 90 days minimum for storage, and egress bandwidth is limited (honor system) to your total monthly data storage amount.
      - thayne 1y ago
        Wasabi also requires you to pay for a minimum of 1TB, whereas B2 charges per GB. That doesn't really matter for a company using a ton of storage, but it does for my personal use case of a few tens of GB.
    - trollied 1y ago
      Backblaze don’t charge egress if you put it behind Cloudflare (even the free tier).
      - alabastervlog 1y ago
        You won’t, however, be able to serve most e.g. media files or binaries this way, nor serve to clients like mobile apps, while staying within the bounds of Cloudflare’s terms for their free and “self-serve” tier paid accounts. (Unless something’s changed since the last time I checked)
  - Twirrim 1y ago
    Backblaze uses erasure encoding, which is currently the best and most efficient way to do storage. It's how every major object storage platform works. The very quick high level explanation is that in storage you talk about "stretch factor". For every byte of file, how many bytes do you have to store to get the desired durability. If your approach to durability is you make 3 copies, that's a 3x stretch factor. Assuming you're smart, you'll have these spread across different servers, or at least different hard disks, so you'd be able to tolerate the loss of 2 servers. With erasure encoding you apply a mathematical transformation to the incoming object and shard it up. Out of those shards you need to retrieve a certain number to be able to reproduce the original object. The number of shards you produce and how many you need to recreate the original are configurable. Let's say it shards to 12, and you need 9 to recreate. The amount of storage that takes up is the ratio 9:12, so that's a 1.3x. For every byte that comes in, you need to store just 1.3x bytes. As before you'd scatter them across 12 shards and only needing any 9 means you can tolerate losing 3 hard disks (servers?) and still be able to retrieve the original object. That's better durability despite taking up 2.7x less storage. The drawback is that to retrieve the object, you have to fetch shards from 9 different locations and apply the transformation to recreate the original object, which adds a small bit of latency, but it's largely negligible these days. The cost of extra servers for your retrieval layer is significantly less than a storage server, and you wouldn't need anywhere near the same number as you'd otherwise need for storage. The underlying file system doesn't really have any appreciable impact under those circumstances. I'd argue ZFS is probably even worse, because you're spending more resources on overhead. You want something as fast and lightweight as possible. Your fixity checks will catch any degradation in shards, and recreating shards in the case of failure is pretty cheap.
    - srean 1y ago
      > It's how every major object storage platform works. Very interesting. Could you name a few, am curious. I would be happy if erasure codes are actually being used commercially. What I find interesting is the interaction of compression and durability -- if you lose a few compressed bytes to reconstruction error, you lose a little more than a few. Seems right up rate-distortion alley.
  - deleted 1y ago
    [deleted]
cj 1y ago
From the article (TLDR: the author has a financial interest in seeing their stock decline) > Initial Disclosure: After extensive research, we believe the evidence justifies a short position in shares of Backblaze (NASDAQ: BLZE). Morpheus Research holds short positions in BLZE, and Morpheus Research may profit from short positions held by others. This report represents our opinion, and we encourage all readers to do their own due diligence. Please see our full disclaimer at the bottom of the report.
- dist-epoch 1y ago
  And contrary to popular opinion, Taleb thinks that you should put more weight on such opinions, because they have skin in the game and are willing to back their beliefs with money. Short selling is not risk free, if they are wrong, they will get burned.
  - hobs 1y ago
    I mean, just read the article - if half the stuff stated is true its pretty bad, though its interesting how much of the drama is centered around 2022.
    - tw04 1y ago
      If half the stuff stated is not true, he’ll assuredly be facing a lawsuit.
  - jillyboel 1y ago
    And writing articles like this makes it more likely they become right
    - Spooky23 1y ago
      Well yeah, when people find out that someone is stealing from them, they tend to not want to do business.
    - 3eb7988a1663 1y ago
lud_lite 1y ago
As a customer do I need to worry? It is my favourite cheapo backup.
- klodolph 1y ago
  I recommend worrying about any service where you don’t pay a fee that scales with usage. This includes Backblaze. Yes, I recommend worrying about Backblaze and I’ve recommended worrying about it for a while. Storage costs money. People love to dream up creative business models where your personal storage is subsidized by some other part of the business, but I think it’s just a matter of time before the business model changes. At the end of the day, there’s a massive gravitational pull that brings everything in line with market rates. These days, I think we have a pretty good idea of what market rates are for cloud storage. Anything less than market rates should be viewed with suspicion. From another angle, in any long-term relationship with a vendor, you want the vendor to make money. We know that major cloud vendors do, or at least close enough, because they charge the same for small customers and big ones (or close enough). None of them offer unlimited data… or at least, not any more (most of them used to, but those parts of the business always get shut down).
  - lud_lite 1y ago
    Thanks! I suspect that for my use case (actual backup no meed for cloud access) s3 glacier is statistically cheaper.
    - gruez 1y ago
      >actual backup no meed for cloud access How do you test your backups? You do test your backups, right? Your other comment mentions using dropbox, but that's hardly a real backup solution, and you could easily run into a situation where you need to retrieve files beyond the 30 day window.
      - mingus88 1y ago
        If you regularly test your backups, glacier gets a lot more expensive due to egress fees And it’s such a good thing to remind people of. You don’t manage a backup service. Nobody cares about backups. People care about restores.
Havoc 1y ago
sigh...literally just recommended it to a family member as the simple option
- nodesocket 1y ago
  You should not stop recommending Backblaze due to a short seller's opinion piece. What are their motivations?
- EasyMark 1y ago
  do some research, this article smells of hit piece, especially since the author is set to make money off of bad publicity for the company.
sjml 1y ago
Article says they're losing customers to Wasabi, but as far as I can see on a quick perusal of their website, Wasabi is just straight storage? For me, a lot of the benefit of Backblaze comes from a (mostly) good client solution that handles the automated backup. The backup history upsell is also great for someone (like me) whose travel patterns often mean going months without reliable internet. I know I could use some open source stuff to get similar functionality, but I feel almost as nervous rolling my own backup as I would rolling my own crypto. Does Wasabi have some client solution that I'm missing?
- tw04 1y ago
  You’re missing the point. Enterprise customers where they would presumably see the bulk of their profits is what they’re losing to wasabi. Commercial “unlimited backups” is not a wildly profitable business which is why basically every other competitor in the space either failed or intentionally exited the market segment.
  - sjml 1y ago
    Ah, got it; that makes sense. Thanks for the clarification.
- gruez 1y ago
  >Article says they're losing customers to Wasabi, but as far as I can see on a quick perusal of their website, Wasabi is just straight storage? That's addressed in the article: >Since 2021, Backblaze’s B2 Cloud Storage segment revenue growth has outpaced its legacy Computer Backup segment. In Q4 2024, the company announced that its B2 Cloud Storage segment generated $17.1 million in revenue, surpassing its Computer Backup revenue of $16.7 million. Even if Wasabi isn't a straight replacement for Backblaze's entire business, it's a replacement for its biggest and fastest growing segment.
  - nikisweeting 1y ago
    how in the world do they only make $17.1 in revenue, everyone I know is on BackBlaze, even if they're only used by techy people I'm surprised they're not making $100m+/quarter.
rdtsc 1y ago
> While Budman claimed that he wanted to avoid any appearance of trying to “time the market,” he appears to have done so nearly perfectly, as Backblaze’s shares crashed by as much as 26% intraday following the announcement and have continued to slide ever since.[5] Doesn’t that seem like insider trading? I guess he can claim he didn’t know so and so was going to quit.
- Spooky23 1y ago
  It almost certainly is. Canceling the planned sale makes it look even worse. But… are there securities laws in this era where policy decisions are timed to pump/dump the lowest?
- hinkley 1y ago
  Not to say he’s innocent, but insiders can also trigger market crashes just by selling their stock. There are public records of substantial holdings by company insiders and while I don’t think they’re made available immediately, they are updated periodically and people can and do read into it. That’s part of why they usually deputize a brokerage to periodically sell a fraction of their holdings at intervals. It’s been a long while since I paid any attention to this but I do believe I saw at least a couple of instances of an insider triggering weakness in their stock just by increasing the rate of sale of their holdings.
  - rdtsc 1y ago
    Yeah it would have to be something like that. It seems a too obvious of a move, so I figured he might have had a solid loophole.
    - hinkley 1y ago
      To wit: Bill Gates did a bunch of press before starting his foundation to make it clear that him selling MS shares was not about concerns over MS’s future but that he needed a shitload of money for other pursuits. And Warren Buffet would use many frontmen to slowly buy shares without triggering a buying frenzy. You can’t just buy or sell 3% of a company without causing drama.
mikeryan 1y ago
Totally an aside but is Morpheus what happened to the Hindenburg Research guys after the founder of that stepped away? The site is eerily similar and the timing makes sense. I loved reading Hindenburg’s research.
- sndean 1y ago
  I think so, or at least they have Hindenburg alumni working for them: https://x.com/NateHindenburg/status/1900596203156304371 https://x.com/NateHindenburg/status/1900596203156304371
- justinclift 1y ago
  Any idea why the founder stepped away?
  - SSLy 1y ago
    To me, the Hindenburg Research announcement seemed to suggest that they were being threatened by the subjects of their research.
  - mikeryan 1y ago
    Sounds like he just decided it was time. He wrote a pretty gracious post about it. https://hindenburgresearch.com/gratitude/ https://hindenburgresearch.com/gratitude/ Funny, I wrote this without seeing what the full URL was (I’m on my phone) so the use of the word “gracious” preceded me knowing the path was /gratitude
guerrilla 1y ago
Well if they go out of business where the hell am I going to get my hard drive statistics from? ;D
- tgtweak 1y ago
  Did they cook the books on those too? honestly I participated in the IPO then sold when it was up a bit - I had faith in their fundamentals as a business but they did not seem mature as a public company.
  - guerrilla 1y ago
    I don't know what the incentive would be for doing that. Could they use it to drive prices on HDDs lower somehow? I vaguely recall them being activist as far as quality.
avsteele 1y ago
Very happy with their B2 storage. Easy to use, works well, prices fine. I use it as a backup target for several of my Synology NAS's. I hope they stay in business
nikisweeting 1y ago
None of this really shook my faith in Backblaze being able to recover until I got to this part: > Instead, Backblaze’s new CFO, Marc Suidan, joined from Beachbody (NYSE: BODI), a multi-level marketing company eek
- hiyer 1y ago
  Beachbody isn't an MLM. They sell workout programs (used to be dvds but have now moved to a subscription model). From personal experience, I can say that at least one of their programs - Tony Horton's P90X - is very good.
  - deleted 1y ago
    [deleted]
  - sixhobbits 1y ago
    I know nothing about them so not saying you're wrong but the statement "X is not an MLM" is normally a positive indication that X is an MLM. And then promoting them also gives strong mlm vibes. So I would bet more money on them being an mlm after reading your comment than before
    - slenk 1y ago
      BODI was an MLM that had to stop being an MLM and are hemorrhaging money
    - ellen364 1y ago
      Under that rule of thumb, anything accused of being an MLM will seem like an MLM, even if the accusation is absurd. "Uh, what?? Air isn't an MLM, it's just the thing we breath. We all need it to live." "Huh, I guess air is an MLM after all. Wild."
      - hinkley 1y ago
        Conversely, “they’re not an MLM, they sell a product.” Is a bullshit, non-defense statement. MLMs always have a product. That’s what keeps them from being Ponzi schemes.
everfrustrated 1y ago
Morpheus Research should look at Fastly next.
erichocean 1y ago
Short-seller writes disparaging article to move market, news at 11. (At least they disclose it at the bottom, but it should be in the title.)
memset 1y ago
Who are the players in the “s3 compatible but cheaper than AWS” space? - Wasabi - idrive Who else?
- thomasjudge 1y ago
  How about S3 Glacier?
- manquer 1y ago
  Almost every cloud provider outside of Azure and GCP have an s3 compatible offering . S3 API is de-facto standard for object storage tooling Cloudflare, scaleway, hetzner, OVH, Oracle, minio and dozens of others all have s3 compatible object stores Most of them expect AWS have at least inter cloud transfer free (or discount Azure and GCP) being part of bandwidth alliance(BWA). AWS S3 pricing is designed to keep you in the ecosystem , not be the cheapest, so tend to be costliest not cheapest unless your workload is archival. For almost all non archival workloads egress costs will be on par or much higher than storage costs and AWS[1] charges a lot for any bandwidth. AWS also makes migration really expensive so if you started with them, you are likely stuck as you would have to pay up to 10-12 months of cost to migrate out if you are on anything but the standard tier (cheaper the tiers higher the retrieval costs) [1] All tier one providers have 10-20x b/w costs compared to tier two , however Azure and GCP discount for inter cloud transfers AWS does not https://www.cloudflare.com/bandwidth-alliance/ https://www.cloudflare.com/bandwidth-alliance/
  - memset 1y ago
    Understood. Are there lesser-known providers that I could consider for hobby projects?
    - j45 1y ago
      Wasabi seems reasonable.
  - Manouchehri 1y ago
    GCP has an S3 compatible endpoint for GCS. I’ve used it and it works fine. It’s only Azure that isn’t on the S3 API train.
PeterStuer 1y ago
Wasabi a more known brand than Backblaze in the storage space? Doubt!
- mdasen 1y ago
  It might depend on who you are. I think Backblaze is well known on here because they've been around for longer and their hard drive stats posts are well liked. If you're a less technical CTO, Wasabi seems to do a lot more traditional marketing on things like sports games: https://ibb.co/21qNkM9b https://ibb.co/21qNkM9b (NBA, NHL, Premier League soccer). I'm not saying that makes them better, but a lot of people with purchasing power are going to be seeing Wasabi around. Wasabi has also been pushing value-add services on top of their storage with Wasabi AiR (https://wasabi.com/cloud-object-storage/wasabi-air https://wasabi.com/cloud-object-storage/wasabi-air). It's basically an AI-powered database of your content. If you're running a place generating lots of content, having a system automatically tag and make searchable all those images and videos is a really nice value-add. Being able to search for a video clip containing a specific person in your library junk pile of video can be nicely useful for a lot of organizations. It could just be that different people get their brand awareness from different places.
sndean 1y ago
Can anyone recommend a decent Backblaze alternative in case things really go south? Not so much for storage but for the automated computer backups that I have Backblaze doing. I'm okay paying more than Backblaze's $9/month.
- wmf 1y ago
  I haven't tried it but Arq has a good reputation.
- ryao 1y ago
  I have no experience with them but I have heard good things about rsync.net. They use ZFS.
- bartvbl 1y ago
  I use Jottacloud, which is quite similar in many respects.
- cantrecallmypwd 1y ago
  Much data, medium risk tolerance: Mega Small data, or low risk tolerance: Tarsnap
  - rsyring 1y ago
    Tarsnap restore times are crazy slow. Avoid. We replaced with Borg.
- tinodb 1y ago
  I’m using Arq which backs up to a Hetzner storage box. Cheapest €/TB I could find.
Fizzadar 1y ago
Moved to wasabi from their s3-like b2 product because it was so utterly unreliable. Pretty wild list of things if true.
- e40 1y ago
  I use b2 and never had any issues. What problems did you have?
aghilmort 1y ago
ugh backblaze was great alt to S3 the heroku of storage for a while, used them often few years ago
jmcguckin 1y ago
I think Backblazes pricing model is unsustainable and expect them (and any competitors who mimic their model) to eventually fail when the money runs out. Racks and racks of disk drives use a lot of power and cost a lot to keep running. A better model would be storage based on tape; one of those large tape libraries (e.g. iceberg) with nearline disk space. Most of the data that gets uploaded never gets accessed, so keeping it on tape instead of spinning rust makes sense. Sure, there’s tradeoffs, but imagine how much they’d save if they could downsize their data center spending by 90%.
registeredcorn 1y ago
> Initial Disclosure: After extensive research, we believe the evidence justifies a short position in shares of Backblaze (NASDAQ: BLZE). Morpheus Research holds short positions in BLZE, and Morpheus Research may profit from short positions held by others. This report represents our opinion, and we encourage all readers to do their own due diligence. Please see our full disclaimer at the bottom of the report. Although I appreciate that they included this, I can't help but feel it would have been more apparent if this statement had been included before the bullet points of the article. By the point I saw that statement, I had already formed an opinion on Backblaze. Although I am not saying Morpheus has done anything inherently dishonest, I do think the placement was intentional, and that it would have served the readership better if it had been the first thing that readers see.

271 points by PaywallBuster 1y ago

tl;dr this is activist short seller report/investigation, some of the points made: - never been profitable - execs selling aggressively - loosing customers to Wasabi - accused of cooking the books - being sued by former execs for anti whistleblower/wrongful termination - execs leaving

ryao 1y ago
Wasabi uses ZFS while backblaze does not. I wonder if this in any way contributed to the cost differences.
- k8sToGo 1y ago
  Wasabi also has a minimum storage requirement of 90 days
- mkj 1y ago
  Wasabi doesn't seem to be a public company, so are they profitable?
- perrygeo 1y ago
  I suspect it does. When I was evaluating Wasabi years ago, the sales engineers were very interested in knowing what specific kind of data we had and how compressible it was. So my guess (pure speculation) at the time was they use ZFS compression internally but charge customers for the uncompressed size.
  - dist-epoch 1y ago
    most of the files that matter, the big ones, are already compressed/high entropy - images, videos, ...
  - Twirrim 1y ago
    If they care about compression at the ZFS level, that means your file is going to be visible to anyone able to log in to the server, because they're relying on (at best) encryption at rest. That's not a great security model for a storage service. You don't want anyone to be able to log in to a server and see your actual files unencrypted. If they're going to compress/decompress, ideally you'd want them to have that at the point of ingestion, then encrypted, and then store that on the target drive. That way you can put very strong controls (audit, architecture, software etc) around your encryption and decryption, and be at reduced risk from someone getting access to storage servers.
- ksec 1y ago
  >Wasabi uses ZFS Can't seems to find anything specific about Wasabi uses ZFS on Google. And Wasabi doesn't change you on egress. So I guess they are similar in terms of pricing. Although B2 seems to be way more popular on HN. I rarely see Wasabi here.
  - rustc 1y ago
    > And Wasabi doesn't change you on egress. Wasabi only allows as much egress as the amount of data you're storing and I don't think you can even pay for more: https://wasabi.com/pricing/faq#free-egress-policy https://wasabi.com/pricing/faq#free-egress-policy.
    - j45 1y ago
      You can put something like cloudflare in front of it fro free. There's a number of CDNS that participate in zero egress.
  - badlibrarian 1y ago
    Book price is $6.99/TB for Wasabi vs $6/TB for Backblaze. Wasabi charges 90 days minimum for storage, and egress bandwidth is limited (honor system) to your total monthly data storage amount.
    - thayne 1y ago
      Wasabi also requires you to pay for a minimum of 1TB, whereas B2 charges per GB. That doesn't really matter for a company using a ton of storage, but it does for my personal use case of a few tens of GB.
  - trollied 1y ago
    Backblaze don’t charge egress if you put it behind Cloudflare (even the free tier).
    - alabastervlog 1y ago
      You won’t, however, be able to serve most e.g. media files or binaries this way, nor serve to clients like mobile apps, while staying within the bounds of Cloudflare’s terms for their free and “self-serve” tier paid accounts. (Unless something’s changed since the last time I checked)
- Twirrim 1y ago
  Backblaze uses erasure encoding, which is currently the best and most efficient way to do storage. It's how every major object storage platform works. The very quick high level explanation is that in storage you talk about "stretch factor". For every byte of file, how many bytes do you have to store to get the desired durability. If your approach to durability is you make 3 copies, that's a 3x stretch factor. Assuming you're smart, you'll have these spread across different servers, or at least different hard disks, so you'd be able to tolerate the loss of 2 servers. With erasure encoding you apply a mathematical transformation to the incoming object and shard it up. Out of those shards you need to retrieve a certain number to be able to reproduce the original object. The number of shards you produce and how many you need to recreate the original are configurable. Let's say it shards to 12, and you need 9 to recreate. The amount of storage that takes up is the ratio 9:12, so that's a 1.3x. For every byte that comes in, you need to store just 1.3x bytes. As before you'd scatter them across 12 shards and only needing any 9 means you can tolerate losing 3 hard disks (servers?) and still be able to retrieve the original object. That's better durability despite taking up 2.7x less storage. The drawback is that to retrieve the object, you have to fetch shards from 9 different locations and apply the transformation to recreate the original object, which adds a small bit of latency, but it's largely negligible these days. The cost of extra servers for your retrieval layer is significantly less than a storage server, and you wouldn't need anywhere near the same number as you'd otherwise need for storage. The underlying file system doesn't really have any appreciable impact under those circumstances. I'd argue ZFS is probably even worse, because you're spending more resources on overhead. You want something as fast and lightweight as possible. Your fixity checks will catch any degradation in shards, and recreating shards in the case of failure is pretty cheap.
  - srean 1y ago
    > It's how every major object storage platform works. Very interesting. Could you name a few, am curious. I would be happy if erasure codes are actually being used commercially. What I find interesting is the interaction of compression and durability -- if you lose a few compressed bytes to reconstruction error, you lose a little more than a few. Seems right up rate-distortion alley.
- deleted 1y ago
  [deleted]

cj 1y ago

From the article (TLDR: the author has a financial interest in seeing their stock decline) > Initial Disclosure: After extensive research, we believe the evidence justifies a short position in shares of Backblaze (NASDAQ: BLZE). Morpheus Research holds short positions in BLZE, and Morpheus Research may profit from short positions held by others. This report represents our opinion, and we encourage all readers to do their own due diligence. Please see our full disclaimer at the bottom of the report.

dist-epoch 1y ago
And contrary to popular opinion, Taleb thinks that you should put more weight on such opinions, because they have skin in the game and are willing to back their beliefs with money. Short selling is not risk free, if they are wrong, they will get burned.
- hobs 1y ago
  I mean, just read the article - if half the stuff stated is true its pretty bad, though its interesting how much of the drama is centered around 2022.
  - tw04 1y ago
    If half the stuff stated is not true, he’ll assuredly be facing a lawsuit.
- jillyboel 1y ago
  And writing articles like this makes it more likely they become right
  - Spooky23 1y ago
    Well yeah, when people find out that someone is stealing from them, they tend to not want to do business.
  - 3eb7988a1663 1y ago

lud_lite 1y ago

As a customer do I need to worry? It is my favourite cheapo backup.

klodolph 1y ago
I recommend worrying about any service where you don’t pay a fee that scales with usage. This includes Backblaze. Yes, I recommend worrying about Backblaze and I’ve recommended worrying about it for a while. Storage costs money. People love to dream up creative business models where your personal storage is subsidized by some other part of the business, but I think it’s just a matter of time before the business model changes. At the end of the day, there’s a massive gravitational pull that brings everything in line with market rates. These days, I think we have a pretty good idea of what market rates are for cloud storage. Anything less than market rates should be viewed with suspicion. From another angle, in any long-term relationship with a vendor, you want the vendor to make money. We know that major cloud vendors do, or at least close enough, because they charge the same for small customers and big ones (or close enough). None of them offer unlimited data… or at least, not any more (most of them used to, but those parts of the business always get shut down).
- lud_lite 1y ago
  Thanks! I suspect that for my use case (actual backup no meed for cloud access) s3 glacier is statistically cheaper.
  - gruez 1y ago
    >actual backup no meed for cloud access How do you test your backups? You do test your backups, right? Your other comment mentions using dropbox, but that's hardly a real backup solution, and you could easily run into a situation where you need to retrieve files beyond the 30 day window.
    - mingus88 1y ago
      If you regularly test your backups, glacier gets a lot more expensive due to egress fees And it’s such a good thing to remind people of. You don’t manage a backup service. Nobody cares about backups. People care about restores.

Havoc 1y ago

sigh...literally just recommended it to a family member as the simple option

nodesocket 1y ago
You should not stop recommending Backblaze due to a short seller's opinion piece. What are their motivations?
EasyMark 1y ago
do some research, this article smells of hit piece, especially since the author is set to make money off of bad publicity for the company.

sjml 1y ago

Article says they're losing customers to Wasabi, but as far as I can see on a quick perusal of their website, Wasabi is just straight storage? For me, a lot of the benefit of Backblaze comes from a (mostly) good client solution that handles the automated backup. The backup history upsell is also great for someone (like me) whose travel patterns often mean going months without reliable internet. I know I could use some open source stuff to get similar functionality, but I feel almost as nervous rolling my own backup as I would rolling my own crypto. Does Wasabi have some client solution that I'm missing?

tw04 1y ago
You’re missing the point. Enterprise customers where they would presumably see the bulk of their profits is what they’re losing to wasabi. Commercial “unlimited backups” is not a wildly profitable business which is why basically every other competitor in the space either failed or intentionally exited the market segment.
- sjml 1y ago
  Ah, got it; that makes sense. Thanks for the clarification.
gruez 1y ago
>Article says they're losing customers to Wasabi, but as far as I can see on a quick perusal of their website, Wasabi is just straight storage? That's addressed in the article: >Since 2021, Backblaze’s B2 Cloud Storage segment revenue growth has outpaced its legacy Computer Backup segment. In Q4 2024, the company announced that its B2 Cloud Storage segment generated $17.1 million in revenue, surpassing its Computer Backup revenue of $16.7 million. Even if Wasabi isn't a straight replacement for Backblaze's entire business, it's a replacement for its biggest and fastest growing segment.
- nikisweeting 1y ago
  how in the world do they only make $17.1 in revenue, everyone I know is on BackBlaze, even if they're only used by techy people I'm surprised they're not making $100m+/quarter.

rdtsc 1y ago

> While Budman claimed that he wanted to avoid any appearance of trying to “time the market,” he appears to have done so nearly perfectly, as Backblaze’s shares crashed by as much as 26% intraday following the announcement and have continued to slide ever since.[5] Doesn’t that seem like insider trading? I guess he can claim he didn’t know so and so was going to quit.

Spooky23 1y ago
It almost certainly is. Canceling the planned sale makes it look even worse. But… are there securities laws in this era where policy decisions are timed to pump/dump the lowest?
hinkley 1y ago
Not to say he’s innocent, but insiders can also trigger market crashes just by selling their stock. There are public records of substantial holdings by company insiders and while I don’t think they’re made available immediately, they are updated periodically and people can and do read into it. That’s part of why they usually deputize a brokerage to periodically sell a fraction of their holdings at intervals. It’s been a long while since I paid any attention to this but I do believe I saw at least a couple of instances of an insider triggering weakness in their stock just by increasing the rate of sale of their holdings.
- rdtsc 1y ago
  Yeah it would have to be something like that. It seems a too obvious of a move, so I figured he might have had a solid loophole.
  - hinkley 1y ago
    To wit: Bill Gates did a bunch of press before starting his foundation to make it clear that him selling MS shares was not about concerns over MS’s future but that he needed a shitload of money for other pursuits. And Warren Buffet would use many frontmen to slowly buy shares without triggering a buying frenzy. You can’t just buy or sell 3% of a company without causing drama.

mikeryan 1y ago

Totally an aside but is Morpheus what happened to the Hindenburg Research guys after the founder of that stepped away? The site is eerily similar and the timing makes sense. I loved reading Hindenburg’s research.

sndean 1y ago
I think so, or at least they have Hindenburg alumni working for them: https://x.com/NateHindenburg/status/1900596203156304371 https://x.com/NateHindenburg/status/1900596203156304371
justinclift 1y ago
Any idea why the founder stepped away?
- SSLy 1y ago
  To me, the Hindenburg Research announcement seemed to suggest that they were being threatened by the subjects of their research.
- mikeryan 1y ago
  Sounds like he just decided it was time. He wrote a pretty gracious post about it. https://hindenburgresearch.com/gratitude/ https://hindenburgresearch.com/gratitude/ Funny, I wrote this without seeing what the full URL was (I’m on my phone) so the use of the word “gracious” preceded me knowing the path was /gratitude

guerrilla 1y ago

Well if they go out of business where the hell am I going to get my hard drive statistics from? ;D

tgtweak 1y ago
Did they cook the books on those too? honestly I participated in the IPO then sold when it was up a bit - I had faith in their fundamentals as a business but they did not seem mature as a public company.
- guerrilla 1y ago
  I don't know what the incentive would be for doing that. Could they use it to drive prices on HDDs lower somehow? I vaguely recall them being activist as far as quality.

avsteele 1y ago

Very happy with their B2 storage. Easy to use, works well, prices fine. I use it as a backup target for several of my Synology NAS's. I hope they stay in business

nikisweeting 1y ago

None of this really shook my faith in Backblaze being able to recover until I got to this part: > Instead, Backblaze’s new CFO, Marc Suidan, joined from Beachbody (NYSE: BODI), a multi-level marketing company eek

hiyer 1y ago
Beachbody isn't an MLM. They sell workout programs (used to be dvds but have now moved to a subscription model). From personal experience, I can say that at least one of their programs - Tony Horton's P90X - is very good.
- deleted 1y ago
  [deleted]
- sixhobbits 1y ago
  I know nothing about them so not saying you're wrong but the statement "X is not an MLM" is normally a positive indication that X is an MLM. And then promoting them also gives strong mlm vibes. So I would bet more money on them being an mlm after reading your comment than before
  - slenk 1y ago
    BODI was an MLM that had to stop being an MLM and are hemorrhaging money
  - ellen364 1y ago
    Under that rule of thumb, anything accused of being an MLM will seem like an MLM, even if the accusation is absurd. "Uh, what?? Air isn't an MLM, it's just the thing we breath. We all need it to live." "Huh, I guess air is an MLM after all. Wild."
    - hinkley 1y ago
      Conversely, “they’re not an MLM, they sell a product.” Is a bullshit, non-defense statement. MLMs always have a product. That’s what keeps them from being Ponzi schemes.

everfrustrated 1y ago

Morpheus Research should look at Fastly next.

erichocean 1y ago

Short-seller writes disparaging article to move market, news at 11. (At least they disclose it at the bottom, but it should be in the title.)

memset 1y ago

Who are the players in the “s3 compatible but cheaper than AWS” space? - Wasabi - idrive Who else?

thomasjudge 1y ago
How about S3 Glacier?
manquer 1y ago
Almost every cloud provider outside of Azure and GCP have an s3 compatible offering . S3 API is de-facto standard for object storage tooling Cloudflare, scaleway, hetzner, OVH, Oracle, minio and dozens of others all have s3 compatible object stores Most of them expect AWS have at least inter cloud transfer free (or discount Azure and GCP) being part of bandwidth alliance(BWA). AWS S3 pricing is designed to keep you in the ecosystem , not be the cheapest, so tend to be costliest not cheapest unless your workload is archival. For almost all non archival workloads egress costs will be on par or much higher than storage costs and AWS[1] charges a lot for any bandwidth. AWS also makes migration really expensive so if you started with them, you are likely stuck as you would have to pay up to 10-12 months of cost to migrate out if you are on anything but the standard tier (cheaper the tiers higher the retrieval costs) [1] All tier one providers have 10-20x b/w costs compared to tier two , however Azure and GCP discount for inter cloud transfers AWS does not https://www.cloudflare.com/bandwidth-alliance/ https://www.cloudflare.com/bandwidth-alliance/
- memset 1y ago
  Understood. Are there lesser-known providers that I could consider for hobby projects?
  - j45 1y ago
    Wasabi seems reasonable.
- Manouchehri 1y ago
  GCP has an S3 compatible endpoint for GCS. I’ve used it and it works fine. It’s only Azure that isn’t on the S3 API train.

PeterStuer 1y ago

Wasabi a more known brand than Backblaze in the storage space? Doubt!

mdasen 1y ago
It might depend on who you are. I think Backblaze is well known on here because they've been around for longer and their hard drive stats posts are well liked. If you're a less technical CTO, Wasabi seems to do a lot more traditional marketing on things like sports games: https://ibb.co/21qNkM9b https://ibb.co/21qNkM9b (NBA, NHL, Premier League soccer). I'm not saying that makes them better, but a lot of people with purchasing power are going to be seeing Wasabi around. Wasabi has also been pushing value-add services on top of their storage with Wasabi AiR (https://wasabi.com/cloud-object-storage/wasabi-air https://wasabi.com/cloud-object-storage/wasabi-air). It's basically an AI-powered database of your content. If you're running a place generating lots of content, having a system automatically tag and make searchable all those images and videos is a really nice value-add. Being able to search for a video clip containing a specific person in your library junk pile of video can be nicely useful for a lot of organizations. It could just be that different people get their brand awareness from different places.

sndean 1y ago

Can anyone recommend a decent Backblaze alternative in case things really go south? Not so much for storage but for the automated computer backups that I have Backblaze doing. I'm okay paying more than Backblaze's $9/month.

wmf 1y ago
I haven't tried it but Arq has a good reputation.
ryao 1y ago
I have no experience with them but I have heard good things about rsync.net. They use ZFS.
bartvbl 1y ago
I use Jottacloud, which is quite similar in many respects.
cantrecallmypwd 1y ago
Much data, medium risk tolerance: Mega Small data, or low risk tolerance: Tarsnap
- rsyring 1y ago
  Tarsnap restore times are crazy slow. Avoid. We replaced with Borg.
tinodb 1y ago
I’m using Arq which backs up to a Hetzner storage box. Cheapest €/TB I could find.

Fizzadar 1y ago

Moved to wasabi from their s3-like b2 product because it was so utterly unreliable. Pretty wild list of things if true.

e40 1y ago
I use b2 and never had any issues. What problems did you have?

aghilmort 1y ago

ugh backblaze was great alt to S3 the heroku of storage for a while, used them often few years ago

jmcguckin 1y ago

I think Backblazes pricing model is unsustainable and expect them (and any competitors who mimic their model) to eventually fail when the money runs out. Racks and racks of disk drives use a lot of power and cost a lot to keep running. A better model would be storage based on tape; one of those large tape libraries (e.g. iceberg) with nearline disk space. Most of the data that gets uploaded never gets accessed, so keeping it on tape instead of spinning rust makes sense. Sure, there’s tradeoffs, but imagine how much they’d save if they could downsize their data center spending by 90%.

registeredcorn 1y ago

> Initial Disclosure: After extensive research, we believe the evidence justifies a short position in shares of Backblaze (NASDAQ: BLZE). Morpheus Research holds short positions in BLZE, and Morpheus Research may profit from short positions held by others. This report represents our opinion, and we encourage all readers to do their own due diligence. Please see our full disclaimer at the bottom of the report. Although I appreciate that they included this, I can't help but feel it would have been more apparent if this statement had been included before the bullet points of the article. By the point I saw that statement, I had already formed an opinion on Backblaze. Although I am not saying Morpheus has done anything inherently dishonest, I do think the placement was intentional, and that it would have served the readership better if it had been the first thing that readers see.